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KELLY v. FULKERSON

September 29, 1967

James J. KELLY, Jr. and Eileen Kelly, James K. Kelly, a minor, by his guardian, James J. Kelly, Jr. and James J. Kelly, Jr., in his own right, Plaintiffs,
v.
James Rex FULKERSON, Defendant, Third-Party Plaintiff, v. James J. KELLY, Jr., Third-Party Defendant



The opinion of the court was delivered by: SHERIDAN

 In this personal injury action judgment was entered for the defendant and for the third party plaintiff on a special jury verdict. Plaintiffs and the third party defendant filed a motion for a new trial.

 The court has jurisdiction under 28 U.S.C.A. ยง 1332. The substantive law of Pennsylvania applies.

 On August 15, 1964, James J. Kelly, Jr., one of plaintiffs, (Kelly), was the owner and operator of an automobile, with his wife, Eileen, and son, James K., as passengers, when it collided with an automobile operated by James Rex Fulkerson, defendant. Kelly was proceeding northerly on Legislative Route 63026 to an intersection with Route 106, a through highway, on which the defendant was proceeding in an easterly direction. Plaintiffs contended Kelly stopped for the stop sign at the intersection, determined it was safe to cross Route 106, but in doing so was struck by defendant travelling at a high speed with his vehicle out of control. Defendant contended Kelly either did not stop or, if he did, he entered the intersection when it was not possible for defendant to avoid the collision. All three in the Kelly car were injured. Defendant denied negligence, set up the defense of contributory negligence and filed a third party complaint against Kelly for contribution in any recovery by Eileen and James K. Kelly.

 The jury found defendant was not negligent, that Kelly was contributorily negligent, and in the third party action that Kelly was negligent, which negligence was a proximate cause of the accident. *fn1"

 The sole issue raised in the motion is whether the court erred in permitting the jury to know that Kelly had been paid his salary during the period of his disability. *fn2" Plaintiffs contend this was prejudicial, and that this prejudice so permeated the entire trial that a new trial should be awarded all parties.

 In support of his claim for past loss of earning capacity, Kelly testified on direct examination that he was disabled from working for 12 weeks. Defendant requested permission to bring out on cross-examination that Kelly had been paid his salary as a New York City detective during this period. Plaintiffs objected on the ground that payment was a gratuity; they did not contend it was in the nature of workmen's compensation. See City of Philadelphia v. Philadelphia Rapid Transit Company, 1940, 337 Pa. 1, 10 A.2d 434. Plaintiffs stated they were not prepared to offer evidence of the circumstances of payment, whether it was under a New York State statute, or a city ordinance, or a contract; rather, they argued that the payment was a gratuity and under the Pennsylvania collateral source rule Kelly was entitled to recover for the salary he would have earned if he had not been disabled.

 In Pennsylvania it is the rule, at least in cases in which payment by the employer does not partake of workmen's compensation or disability benefits, that there can be a double recovery, but plaintiff must "affirmatively [show] that these payments were a gratuity from his employer." Kite v. Jones, 1957, 389 Pa. 339, 132 A.2d 683; Stevenson v. Pennsylvania Sports & Enterprises, Inc., 1952, 372 Pa. 157, 93 A.2d 236. In Schwoerer v. City of Philadelphia, 1950, 167 Pa. Super. 356, 74 A.2d 755, the court said: "Whether a plaintiff may recover loss of wages from a tort-feasor where the injured party has been paid the wages by his employer is to be determined by the evidence." Plaintiffs devote a large part of their brief to the proposition that the fact that Kelly did not render any services was sufficient proof of a gratuity. This might satisfy Kelly's burden, but it does not make the ultimate determination any less a jury question. To hold otherwise would make this an issue for the court and leave all other issues to the jury. Plaintiffs attempt to distinguish Kite because of the executive position of the plaintiff in that case, and conclude that this and an earlier case, Pensak v. Peerless Oil Co., 1933, 311 Pa. 207, 166 A. 792, stand on their special facts. In Pensak plaintiff's employer was a business owned by himself and members of his immediate family. The court in Kite, citing Pensak, laid down the rule for all plaintiffs, not just those whose circumstances might open the door to fraud.

 
"* * * The law is clear that if a plaintiff receives his regular compensation during the period of his incapacity he may not recover for his loss of salary or wages unless he affirmatively shows that these payments were a gratuity from his employer: Antonelli v. Tumolo and Archangelo, 390 Pa. 68, 132 A.2d 285; Pensak v. Peerless Oil Co., 311 Pa. 207, 166 A. 792; Schwoerer v. City of Philadelphia, 167 Pa.Super. 356, 74 A.2d 755. Cf. Stevenson v. Pennsylvania Sports and Enterprises, Inc., 372 Pa. 157, 93 A.2d 236. In Pensak v. Peerless Oil Co., 311 Pa., at pages 209, 210, 166 A. at page 792, supra, the Court said:
 
"'The item, wages * * * cannot be sustained. It is based on a loss of salary during the time plaintiff was incapacitated. But he did not lose any salary. It was paid to him. True he says it was a gift. * * * His salary was $85 per week and he received it. Characterizing as a gift the money paid to him does not make it so. To permit a recovery of money under the guise of wages lost would, with the facts as they here appear, open a wide door to misrepresentation and fraud in this class of cases.'
 
"In Stevenson v. Pennsylvania Sports and Enterprises, Inc., 372 Pa. at page 163, 93 A.2d 236, supra, the Court said: '"Whether a plaintiff may recover loss of wages from a tort-feasor where the injured party has been paid the wages by his employer is to be determined by the evidence. The rule of law is clear: if the payments by the employer were a gratuity or gift, claimant may recover for loss of wages against a third party tort-feasor. The generosity of the employer does no redound to the benefit of the wrongdoer."'
 
"The plaintiff testified in that case that the money paid to him by his employer was a gift and the Court found that there was ample evidence from which the jury could have concluded that the payments were a gift rather than wages.
 
"In the case at bar, plaintiff has failed to (1) allege, or (2) prove that the payments of salary which he received as an executive (vice president) from his employer after the accident were a gratuity."

 The wage payment cases were summarized in an opinion written by Judge Biggs in Feeley v. United States, 3 Cir. 1964, 33 ...


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